11/18/96 Thornquist/Offer to PurchaseN �s
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PROFESSIONAL HOMES
HANDLING ACREAGE
OFYOUR LOTS
'Water
REAL ESTATE RANCHES
NEEDS REALTY IBUSINE3S
BOX 460E LAKESIDE, MT 59922 PROPERTIES
(406) 844-3395 FAX (406) 844-2031
November 18, 1996
Mr. Lawrence Gallagher
City of Kalispell
Planning, Economic & Community Development Dept.
P.O. Box 1997
Kalispell, Montana 59903-1997
Re: Haven Field
Kalispell, Montana
Dear Mr. Gallagher:
Enclosed please find a proposal to purchase Havenfield, consisting of 4.1 acres, by Regency Inns
Management, Inc. of Sioux Falls, South Dakota.
This offer is presented to the City of Kalispell by Woods and Water Realty, of Lakeside,
Montana, as Buyers Agent for Regency Inns Management, Inc, Broker Fees will be paid at the
time of closing from the proceeds placed in escrow by the Buyer in the amount of $58,000.00 or
8% of the agreed upon purchase price.
Should you or anyone within the City of Kalispell have any questions regarding this proposal,
please do not hesitate to call me.
Sin rely,
David C. Thomquist
Broker Associate
Havenfield
Kalispell, Montana
Proposal
This proposal is being presented to the City of Kalispell, Montana, to develop Parcel Number 2, an
approximate 4.1 acre piece known as Havenfield (a softball field), and also for the use of the Lion
Park Street, a 22,825 rectangular piece.
Regency Inns Management and other entities would like to make a proposal to the City of Kalispell,
Montana, for the development of Parcel Number 2 into a complex of two hotels with approximately
80 units each and a full -service restaurant, and for the use of Lion Park Street as a parking area . As
you will see by the enclosed site plan (Exhibit A), two hotels fit nicely surrounding the 5,500 square -
foot restaurant. The first of the hotels and the restaurant will be constructed as soon as possible with
an early 1998 opening date, and the hotel will be a nationally recognized, franchised property similar
to the enclosed floor plan. The second hotel would be constructed as demand warrants so as to not
drastically impede the hotel market. We foresee the exterior to be like the photograph of the Kelly
Inn, West Yellowstone, Montana.
As you will see in the photo elevations, the restaurant will be a full -service restaurant, similar to
Jake's in Billings, Montana. As you see, Regency Inns Management is bringing to the table projects,
thoughts and ideas that have been successful elsewhere. We bring to Kalispell proven, successful
ideas and a proven track record.
We propose to lease Lion Park Street for One Dollar ($1.00) per year to be used jointly as a parking
lot by the hotels, restaurant and the park.
This proposal is assuming that all correct zoning is in place for the above -mentioned development,
and also that all services — i.e., water, sewer, electric, phone, etc. — are either on the property or
adjoining the property.
We at Regency Inns Management believe this proposed development fits nicely with the City of
Kalispell and helps dress up the entrance to the city. Further development of this quality will only
enhance and beautify the entrance to the city by making this an eye -appealing presentation to the
visitor. We propose to nicely landscape the property we purchase and also landscape around the
parking lot of Lion Park Street. To add to the ambience of the area, we propose to donate a
minimum of four flower planters to Lion's Park.
Value of Improvements
Two 80-unit hotels and a 5,500 square -foot restaurant along with the values of construction, FF&E
packages, personal property, etc. as a total finished project between $6.1 million and $8.5 million,
depending on franchise quality, cost of construction, etc.
This proposed improvement and development when completed is estimated to bring in approximately
$2.6 million combined annual gross revenue.
Offer
Regency Inns Management, Inc. and an assignee would like to offer to the City of Kalispell, Montana,
Seven Hundred Twenty -Five Thousand Dollars ($725,000.00) for Parcel 2 known as Havenfield
(178,596 square feet) and for the use of Lion Park Street for parking area. We would propose a One
Dollar ($1.00) per year lease.
Broker Fees.
Regency agrees to agency representation, and broker's or agents' fees will be paid at time of closing
from proceeds placed in escrow by the Buyer for the proposed price for this land. The broker's fee
will be subtracted from the total price offered for Parcel 2.
Exhibit A Site Plan
Exhibit B Hotel Elevation (Photos)
Exhibit C Restaurant Elevation (Photos)
Exhibit D Purchase Agreement
Exhibit E Copies of Fairfield Brochure
PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of this 15th day of November, 1996, by and
between the City of Kalispell, Montana (hereinafter the "Sellers"), and Regency Inns Management,
Inc. and/or its assignee, a South Dakota Corporation, with its principal office located at 2600 North
Louise Avenue, Sioux Falls, South Dakota 57107 (hereinafter the "Buyer").
WHEREAS, Sellers are the owners of the land which is located in the City of Kalispell,
Montana; and
WHEREAS, the Buyer desires to purchase from the Sellers the land which is located in the
City of Kalispell, Montana, for construction of two motels and a restaurant, and
WHEREAS, the Sellers and Buyer desire to set forth their understanding with regard to the
purchase of the land by the Buyer;
NOW, THEREFORE, the parties agree as follows:
1. Sellers agree to sell and Buyer agrees to purchase from Sellers the real estate located in
Kalispell, Montana (Exhibit A), legally described as follows:
................................................_._... .........._..._.....................................
...........................................................................................................................
Parcel2>Le. aldescr>:tQtr:tobern :setelat:a:later:date
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(herein sometimes referred to as the "Premises")
2. Purchase Price. The purchase price to be paid by Buyer to Sellers shall be the sum of
Seven Hundred Twenty -Five Thousand Dollars ($725,000.00), which purchase price shall include
only the Premises.
3. Payment of the Purchase Price. The purchase price shall be paid by Buyer to Sellers
at the following times and in the following manner:
A. The sum of Twenty -Five Thousand Dollars ($25,000.00) as an earnest money down
payment, put in escrow upon acceptance of this Purchase Agreement.
B. The balance of the purchase price in the amount of Seven Hundred Thousand Dollars
($700,000.00) shall be due and payable to the Sellers at closing.
4. Default. In the event of any default hereunder by Buyer which is not cured within a
period of thirty (30) days following notice from Seller to Buyer that such default exists, Seller's sole
remedy shall be to cancel this Agreement and retain all Earnest Money paid hereunder as liquidated
damages for Buyer's breach. Sellers and Buyer agree that, in the event of breach by Buyer, the
damages to Sellers will be incapable or very difficult of accurate estimation and that there has been
a reasonable endeavor by Sellers and Buyer to fix fair compensation and that the Twenty -Five
Thousand Dollars ($25,000.00) Earnest Money as liquidated damages to Sellers bears a reasonable
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relation to probable damages and is not disproportionate to any damages reasonably to be anticipated.
Nothing contained herein shall deprive Buyer of the remedy of specific performance. The obligations
of Buyer are intended to be nonrecourse. Time is of the essence.
If a dispute arises between the parties hereto concerning this Agreement or any provision
thereof or obligation thereunder, then the nonprevailing parry shall pay any and all costs and expenses
incurred by the other party in enforcing or establishing its rights hereunder, including without
limitation, court costs and reasonable attorneys' fees and disbursements, which obligations shall
survive the delivery of the Deed.
5. Closing Date. Sellers and Buyer mutually agree to close said sale on or before
January 31, 1997, unless the parties mutually agree to change the closing date.
6. Possession. Possession of the Premises shall be given to Buyer by Sellers at closing.
7. Title Insurance. Sellers agree to provide to Buyer an owner's commitment for title
insurance (on ALTA Form 1990-B) insuring the Premises purchased hereunder for the sum of Seven
Hundred Twenty -Five Thousand Dollars ($725,000.00), insuring good and marketable title to be in
the Sellers' name; subject, however, to easements and rights -of -way for utilities, highways and storm
sewers of record. The cost incurred in obtaining the title insurance shall be shared equally between
the Sellers and the Buyer.
8. Sellers' Representations and Warranties. As a further inducement to Buyer to enter
into this Purchase Agreement and to consummate the transaction contemplated by this Purchase
Agreement, Sellers, and each of them do hereby represent and warrant to Buyer and agree as follows:
A. Sellers have good and insurable title to the premises and the personal property and
all other property to be transferred hereunder. The title to be granted and conveyed
shall be merchantable, fee simple title, free and clear of all matters except those
exceptions disclosed on the Title Commitment, if approved, or otherwise waived by
Buyer or provided for herein;
B. Sellers have full right, power, and authority and have taken all requisite action to
enter into this Purchase Agreement and to grant, sell, and convey the premises and
the personal property and all other property to be transferred hereunder to Buyer as
provided in this Purchase Agreement and to carry out its obligation as set forth in
this Purchase Agreement;
C. Sellers have not received notice from any city or other governmental authority of any
violation affecting the premises and the personal property and all other property to
be transferred hereunder except as disclosed in writing to Buyer prior to the
execution of this Purchase Agreement, if any;
D. There are no pending improvements, liens, or special assessments to be made against
the premises by any governmental authority or third party, except as otherwise
disclosed in writing to Buyer prior to the execution of this Purchase Agreement;
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E. No work has been performed or is in progress by Sellers or at the direction of
Sellers, and no materials have been furnished to the premises or any portion thereof,
which might give rise to mechanic's, materialman's, construction, or other liens
against the premises;
F. No consent or approval of any person, entity, or government agency or authority is
required with respect to the execution and delivery of this Purchase Agreement by
Sellers and, as of the closing date, no unobtained such consent or approval will be
required with respect to the consummation by Sellers of the transactions
contemplated hereby or the performance by Sellers of its obligations hereunder;
G. Sellers are not and never been a "foreign person", as that term is used in Section
1445 of the Internal Revenue Code of 1954, as amended;
H. Sellers shall not grant, sell, convey, or encumber the premises and the personal
property and all other property to be transferred hereunder prior to the closing date;
I. The premises and the personal property and all other property to be transferred
hereunder are not subject to any leasehold interest and Sellers further agree that
Sellers will not enter into any lease of the premises and the personal property and all
other property to be transferred hereunder or any part thereof,
J. There are no disputes concerning the lines and corners of the premises, which lines
and corners are clearly marked and there are no encroachments upon the premises;
K. There is no indebtedness outstanding and no outstanding or unpaid bills incurred for
labor and material in connection with the premises, or for the service of architects,
surveyors, or engineers in connection with the premises;
L. All streets necessary to serve the premises are being installed and will be dedicated
and accepted for use and maintenance by the closing date by application to
governmental entities and there are no pending street changes that will materially
alter such service to the premises;
M. There are no taxes, assessments, or liens against the premises for any present or past -
due taxes or for paving, sidewalk, curbing, sewer, or any other street or other
improvements of any kind, with the exception of real estate taxes which are not yet
due and payable;
N. As of the closing date, there will be no outstanding, pending, or threatened suits,
judgments, executions, bankruptcies, condemnation proceedings, zoning changes,
or any other proceedings pending or on record in any court of any nature or before
or by any governmental or administrative agency which could in any manner now
affect Buyer's title to, possession of, or use of the premises and the personal
property and all other property to be transferred hereunder, or which could now or
hereafter constitute a lien upon the premises and the personal property and all other
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property to be transferred hereunder or materially or adversely affect or change the
premises and the personal property and all other property to be transferred
hereunder;
O. Sellers are not surety on any bond or indebtedness wherein through the default
thereof, a lien against the premises and the personal property and all other property
to be transferred hereunder would be created without further legal action;
P. As of the closing date, there will be no recorded or unrecorded liens, security
interests, security agreements, or UCC financing statements against the premises and
the personal property and all other property to be transferred hereunder or any part
thereof, and
Q. The premises are not subject to any federal, state, or local "Superfund" lien
proceeding, claim, liability, or action, or the threat or likelihood thereof, for the
cleanup, removal, or remediation of any "hazardous substance" from the premises
and Sellers have not caused and will not cause, and to the best of Sellers' knowledge,
there never has occurred the release, leak, discharge, spill, disposal, or emission of
any "hazardous substance" as of the date hereof. As used in this Purchase
Agreement, "hazardous substance" means any substance that is toxic, ignitible,
reactive, or corrosive, and that is regulated by any local government, the State of
Wyoming, or the United States of America. "Hazardous substance" includes any and
all materials or substances that are defined as "hazardous waste", "extremely
hazardous waste", or a "Hazardous Substance" pursuant to state, federal, or local
governmental law including without limitation, CERCL, SARA, RCRA, the Clean
Water Act, The OSHA Act, or the Toxic Substances Control Act. "Hazardous
Substance" includes, but is not restricted to asbestos, petroleum products, nuclear
fuel, or materials, known carcinogens, urea formaldehyde, foamed -in -place
insulation, and polychlorinated biphenyl (PCBs).
In the event that any of the representations and warranties set forth in this Paragraph
8. are not true in any material respect as of the closing date or if Sellers otherwise
defaults hereunder, Buyer may terminate this Purchase Agreement on or at any time
prior to the closing date and the Earnest Money shall be immediately returned to
Buyer.
The warranties and representations set forth in this Paragraph 8. shall survive the
closing for the benefit of Buyer. Sellers shall defend, indemnify, and hold harmless
Buyer, and shall reimburse Buyer for, from, and against each and every demand,
claim, loss (including any diminution in value), liability, damage, fine, penalty, cost,
and expense (including, without limitation, attorney fees and consultant and expert
fees imposed on or incurred by Buyer) directly or indirectly relating to, resulting
from, or arising out of any material inaccuracy in any representation or warranty set
forth in this Paragraph 8.
9. Buyer's Representations and Warranties. Buyer represents and warrants as follows:
A. That the Buyer has the right, power and authority to purchase the Premises and the
personal property subject to the terms and conditions as provided under this
Agreement, and to execute, deliver and perform its obligations under this Agreement;
B. To the Buyer's actual knowledge, there exists no action, suit, litigation or proceeding
which would limit the Buyer's ability to purchase the Premises and the personal
property and to perform the terms and conditions of this Agreement.
10. Closing Documentation.
A. At the closing, the Sellers shall deliver to the Buyer a standard form of Montana
Warranty Deed conveying title to the Premises; and
B. At the closing, the Sellers shall deliver to the Buyer a Bill of Sale transferring to the
Buyer all of the Sellers' rights, title and interest in and to the personal property.
11. Operating Expenses, Costs, Charges and Property Taxes. The Sellers shall be
responsible and shall pay for all operating expenses which have accrued or shall become due prior to
the closing date. All operating expenses shall be read and finalized, if reasonably possible, as of the
closing date. All property taxes will be prorated to date of closing.
12. Risk of Loss. Until the closing date, Sellers shall bear the risk of loss to the Premises
and to the personalproperty due to fire or any other casualty. Accordingly, until said closing occurs
Sellers shall keep in full force and effect a policy insuring the Premises and personal property against
loss by all risks insured against under a standard form of all risk coverage.
13. Zoning. The Seller represents that the property is properly zoned for motel and
restaurant use for the City of Kalispell, Montana.
14. Highway Entrance. Purchase is subject to satisfactory review by Buyer of any changes
or curb cuts made by review of the highway department.
15. City of Kalispell. Purchase is subject to satisfactory review by Buyer of any changes
made by review of City of Kalispell or other governing agency.
16. Soil Tests. Purchase is subject to satisfactory review by Buyers of soil test.
17. Restaurant. Purchase is subject to Jake's of Billings, Montana, or its representatives
agreeing to purchase part of site for construction of a full -service restaurant.
18. Lease of Lion Park Street. We lease for One Dollar ($1.00) per year and develop Lion
Park Street, a 22,825 square -foot rectangular piece (approximately .524 acres), to be jointly used as
a parking lot for the restaurant, hotels and Lion Park.
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19. Representation by Agency. The Buyer agrees to agency representation and is
represented by Dave Thornquist.
20. Brokerage Fees. Broker's or agent's fees will be paid at time of closing from proceeds
placed in escrow by the Buyer with full disclosure. Brokerage fees to be subtracted from the offering
price.
21. Notices. Notices shall be given under this Agreement upon delivery to the addresses set
forth below either by certified mail or by delivery from a nationally -recognized, overnight delivery
service. Notices shall be delivered to the following addresses:
To Sellers:
To Buyer: David Sweet
Regency Inns Management, Inc.
2600 North Louise Avenue
Sioux Falls, SD 57107
22. Binding Effect. This Agreement shall be binding upon the parties hereto, their heirs,
successors and assigns.
Dated the year and date first above written.
"Sellers"
"Buyer"
Regency Inns Management, Inc., a
South Dakota Corporation
Im